Year of golden returns

Gold stocks have made almost all the running in the past financial year as investors flocked to gain exposure to the safe haven metal amid concerns of global double-dip recession and ahead of a move by central banks to increase bullion holdings.

The negative influence of worries about the impact of the European debt crisis on global growth and uncertainty about China’s growth outlook in the face of policy tightening combined to drive investors to typical defensive assets such as gold and bonds. The precious metal climbed 33 per cent higher for the financial year, stretching its gains into a 10th consecutive year. It posted a record high of $US1265.30 an ounce on June 21.

As the broader equity market finishes in the black for the first financial year in the past three, resources stocks with foreign assets have fared the best in the benchmark S&P/ASX 200 index, reflecting the weaker sentiment for local assets that pervaded the market in the latter stages of the June quarter following the announcement of the resources rent tax.

African-based explorer
Perseus Mining
was the best performer, booking a gain of more than 200 per cent, after it received environmental approvals for the development of its Central Ashanti gold project in Ghana.

Mozambique-based coalminer
Riversdale
and the Philippines-based gold play
Medusa
Mining shone, rising 97 per cent and 93 per cent respectively over the past 12 months.

However, not everyone was investing with the RSPT in mind. Over the past month renown gold bug Baker Steel Capital Managers increased its holding in emerging gold producer
Silver Lake,
based in Western Australia, but sold down its substantial holding in
Oceanagold
, which has assets in New Zealand and the Philippines.

South-east Asian copper goldminer
PanAust
,
which rose by more than 30 per cent in the financial year, was up more than 2 per cent today after it lifted ore reserve estimates for its Phu Kham copper-gold operation in Laos by 17 per cent. The company said that the current processing rate of 12 million tonnes a year would extend the life of the mine by more than two years to 14 years.

Domestic metals explorer
Paradigm Metals
reported high-grade gold assays from initial reconnaissance sampling at its 100 per cent-owned Temora gold project, 350 kilometres west of Sydney. Paradigm carried out a reconnaissance field program at the Temora project in May, and has just received assays from initial grab samples selected from old mine dumps and from sparse float samples.